Apollo nearly quadruples money on Berry Plastics

Apollo Global has sold Berry Plastics stock three times since the maker of plastic packaging products launched its IPO in October 2012. The most recent transaction was announced in mid-February with Apollo Global’s plan to offload 9 million shares. The buyout shop stands to gain roughly $209.8 million from the sale.

In all, Apollo Global looks to have received nearly $800 million in secondary sales since Berry Plastics went public more than a year ago. Including paper gains, the sponsor appears to have made about 4x its money, according to peHUB calculations. Apollo Global still owns a sizable holding in Berry Plastics of 21 percent.

The buyout shop founded by Leon Black acquired Berry Plastics, along with Graham Partners, in 2006 in a deal valued at $2.25 billion. Apollo Global, Graham and company management invested approximately $483.5 million equity in the deal, according to SEC filings from that time. Apollo Global owned 72.1 percent of Berry Plastics, while Graham Partners had 10.1 percent.

With 72.1 percent, Apollo Global appears to have invested $348.6 million in Berry Plastics, while Graham Partners put in $48.35 million. Apollo Global’s investment came from its sixth fund, which collected $10.1 billion in 2006. (Note: Apollo Global just closed its eighth pool which came in at $17.5 billion in commitments.) Fund VI is generating an 8.7 percent net IRR and 1.5x multiple as of June 30, according to California Public Employees’ Retirement System data.

Berry Plastics went public in October 2012, selling 29.4 million shares at $16 each. Apollo Global owned 66.9 million shares, or 59.4 percent, of the company after the offering. Graham Partners had 5.4 percent or 6.1 million shares. Apollo Global does not appear to have sold shares in the Berry Plastics IPO. The firm likely opted for a Berry Plastics IPO because the company was so big the number of buyers would be limited,banking sources told peHUB at the time. Evansville, Ind.-based Berry Plastics, which makes plastic products like lids and drinking cups, has a $2.8 billion market cap.

Apollo Global’s current sale of 9 million Berry Plastics shares will reduce its stake in the company to about 24.7 million shares, or 21.2 percent, from 33.7 million or 28.9 percent. At $23.32 a share, Berry Plastics’s last reported sale price before the offering was announced, Apollo Global stands to gain $209.8 million. Graham Partners is not selling shares.

Another secondary came in July. Berry Plastics shareholders sold 15 million at $21.63 a share, U.S. Securities and Exchange Commission filings indicate. Apollo Global offered 13.7 million shares and appeared to have received $296.3 million. The deal reduced the firm’s holding to 35.8 million or 31 percent, from 43 percent or 49.5 million. Graham Partners, meanwhile, sold about 1.3 million, cutting its stake to 2.8 percent. Graham Partners looks to have gained about $28 million.

The first stock sale occurred in April 2013. Berry Plastics shareholders divested 16.5 million shares at $17 each. Most of the shares came from Apollo Global, which owned 59.2 percent or 66.9 million. The firm sold 15.11 million and appears to have received $256.87 million. The sale reduced Apollo Global’s stake to 45.8 percent or 51.8 million shares. Graham Partners offered roughly 1.4 million shares and stood to gain $2.38 million.

In 2007, Berry Plastics also paid out a dividend of $14 a share to vested stock holders in 2007. Another $35 a share was paid to nonvested option holders on the second anniversary of the dividend date, SEC filings said. It’s unclear how much of the dividend went to Apollo Global or Graham Partners.

With the three secondaries, Apollo Global appears to have received $763.05 million ($209.88 million + $296.3 million + $256.87 million). Its remaining stake of 24.7 million shares is valued at $592.8 million (at $24 a share, its last trading price). Including paper gains, Apollo Global appears to have made about 4x its money.

Officials for Apollo Global declined to comment.

Luisa Beltran is a senior reporter for sister website peHUB